Westpac index finds consumer confidence plummets further

The Westpac McDermott Miller Consumer Confidence index fell 2.9 points in the September quarter. Photo / Sylvie Whinray

Westpac says consumer confidence has trickled downwards in the September quarter and says it signals the number of New Zealand households who are pessimistic versus optimistic about the country’s economic landscape.

The bank released the results of its quarterly Westpac McDermott Miller Consumer Confidence index today.

The index fell 2.9 points in the September quarter to 80.2, meaning the number of households who are pessimistic about the economy continued to outweigh optimists by a large margin. Anything over 100 indicates a positive picture.

“The big concern for New Zealand households is the pressure on their finances,” Westpac senior economist Satish Ranchhod said.

“The past few months have seen continued large increases in living costs, as well as a related rise in borrowing costs. Those conditions are squeezing households’ spending power.”

Statistics NZ released data on Thursday showing that gross domestic product (GDP) rose 3.2 per cent in the year ended June 2023.

The economy grew 0.9 per cent in the second quarter, keeping the country out of recession and exceeding expectations.

The Westpac index showed only 10 per cent of households surveyed said their financial position had improved over the past year – the lowest result Westpac has seen in the 35 years the survey has been running.

“With financial headwinds continuing to mount, we expect that households will continue to rein in their spending over the coming months,” the index results said. “That will be a significant drag on economic growth through the latter part of the year.”

Ranchhod added that nearly half of households – 47 per cent – told the bank their financial position had deteriorated in the past year.